During his first visit to Moscow as prime minister, Valery Pustovoitenko announced that "Russia is unquestionably Ukraine's strategic partner," Russian media reported on 16 September. Pustovoitenko met with Russian President Boris Yeltsin, who said there are "no large intractable problems" between the two countries. Statements by Russian officials, however, indicate some problems still exist. Following his meeting with Pustovoitenko, Russian Prime Minister Viktor Chernomyrdin said turnover in trade between the two countries in the first half of 1997 was $7.7 billion, down 22 percent on the same period last year. No solution was found to the issue of Ukraine's debt to Russia for gas supplies. Russian presidential spokesman Sergei Yastrzhembskii told reporters that Moscow has no intention of buying from Ukraine Soviet-era Tu-160 and Tu-95MS strategic bombers.

...MAKES SUGAR A PRIORITY ISSUE

One of the topics at the top of Pustovoitenko's agenda was the export of sugar from Ukraine to Russia. Pustovoitenko urged Yeltsin to remove a 25 percent tax imposed on sugar imports last May and a 10 percent value-added tax levied in the summer. The Ukrainian premier said the problem is "seriously slowing down Russian-Ukrainian cooperation." In the past, Ukraine exported 1.1-1.3 million tons of sugar to Russia annually, but this year's contracts provide for only 600,000 tons. According to Interfax, Yeltsin promised to have Prime Minister Chernomyrdin look into the matter.

YELTSIN SAYS LUKASHENKA BROKE AGREEMENT ON ORT JOURNALIST

Yeltsin on 16 September criticized his Belarusian counterpart, Alyaksandr Lukashenka, for allegedly not abiding by an agreement to release Russian Public Television (ORT) journalist Pavel Sheremet, Russian news agencies reported. Russian authorities have said Lukashenka promised at a 6 September meeting with Yeltsin to free Sheremet, but Lukashenka has said the matter will be resolved in Belarusian courts. In an interview published in the official newspaper "Sovetskaya Belarus" on 16 September, Lukashenka said, "I will impeccably fulfill all agreements with Boris Yeltsin. As for Sheremet, that's a matter of routine judicial procedures." Lukashenka added that he is not an "absolute monarch" with the power to arrest and release people at will, "Kommersant-Daily" reported on 17 September.

YELTSIN, CHERNOMYRDIN COMMENT ON MEETING WITH BANKERS

Before a 16 September meeting with Prime Minister Chernomyrdin, Yeltsin said he told six top bankers the previous day that "banks cannot be above the authorities," Russian news agencies reported. He added that banks should serve the government and cooperate with it, settling disputes without resorting to "insults" or "harsh statements" (see "RFE/RL Newsline," 16 September 1997). Chernomyrdin argued that it is incorrect to say the government and some bankers were at "war" before Yeltsin's meeting with the influential businessmen. He added that ministers realize "we cannot do without banks. But there should be tolerance and support for each other," Interfax reported.

MOSCOW DISBURSES FUNDS FOR CHECHEN RECONSTRUCTION

Russian First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy minister, has signed a decree on the transfer to Grozny of the first installment of funds to finance repairs to the Baku-Grozny-Tikhoretsk pipeline, Russian media reported on 16 September. Nemtsov told journalists that the decision to build an alternative pipeline bypassing Chechnya did not mean Moscow would renege on the 9 September agreement to fund repairs to the existing pipeline. Russian government spokesman Igor Shabdurasulov similarly told a press conference on 16 September that plans to build the alternative pipeline "are not intended to spite Grozny or create difficulties in the negotiating process", ITAR-TASS reported.

DISAGREEMENT IN BAKU OVER CHECHEN BYPASS PIPELINE

Azerbaijani Ambassador to Georgia Khadzhan Gadzhiev told Interfax on 16 September that Baku does not object to Russia's recent decision to build an oil pipeline bypassing Chechnya to export Azerbaijan's Caspian oil. "The main thing is that the oil should be exported on time, and it is the responsibility of the Russian side [to determine] how the oil travels from Azerbaijan's border with Russia," Gadzhiev said. But Ahmed Zeynalov, vice president for construction at the Azerbaijani state oil company SOCAR, told Turan on 16 September that the route bypassing Chechnya is not the optimum one for Russia and that technical problems will make construction problematic. In addition, Zeynalov argued, the decision to build a bypass pipeline contravenes the Russian-Chechen-Azerbaijani agreement, signed in Baku in July, on exporting Azerbaijani oil.

DUMA FACTIONS DISAGREE OVER START-2 RATIFICATION

At Yeltsin's bidding, Defense Minister Igor Sergeev and Foreign Minister Yevgenii Primakov met with the leaders of the State Duma factions and some committee chairmen on 16 September to argue the case for ratifying the START-2 treaty, Russian media reported. Communist Party leader Gennadii Zyuganov, Liberal Democratic Party of Russia leader Vladimir Zhirinovsky, and Popular Power faction head Nikolai Ryzhkov told Interfax that they found the ministers' arguments "unconvincing" and will not vote for ratification. ITAR-TASS quoted Duma Defense Committee member Vladimir Volkov as arguing that ratification should be postponed until the economic situation in Russia and the military-political situation in Europe have stabilized. Yabloko leader Grigorii Yavlinskii advocated ratification, while Aleksei Podberezkin, one of the leaders of the Communist faction, argued that the START-3 treaty should be ratified before START-2, "Izvestiya" reported on 17 September.

OFFICIALS DENY REPORT ON PRIMAKOV RESIGNATION

Presidential spokesman Sergei Yastrzhembskii says a report that Foreign Minister Yevgenii Primakov has submitted his resignation is "disinformation" that damages the prestige of Russia and its Foreign Ministry, ITAR-TASS reported on 16 September. The latest edition of the weekly "Moskovskie novosti" claimed Primakov has already handed in a resignation letter. The newspaper's speculations on the reasons for the alleged decision range from the minister's reported desire to return to academia to an attempt by Primakov to leave the Foreign Ministry before a scandal breaks over misappropriated funds. Yastrzhembskii said the president highly values Primakov's activities. Government spokesman Igor Shabdurasulov described the "Moskovskie novosti" report as "nonsense" and a "canard." Foreign Ministry spokesman Gennadii Tarasov dismissed the report as "fantasy," commenting that some Russian media are afflicted with "cadre syndrome" at the end of every summer.

DUBININ SAYS NO NEED TO CHANGE LAWS FOLLOWING REDENOMINATION...

Central Bank Chairman Sergei Dubinin says parliament will not have to approve changes to various laws in connection with the planned ruble redenomination, Russian news agencies reported on 16 September. The Main State Legal Department of the presidential administration recently noted that laws specifying fixed ruble prices, tariffs, wages, and pensions will have to be amended (see "RFE/RL Newsline," 16 September 1997). But Dubinin said the government could issue a document explaining how laws affected by the currency reform will be implemented after 1 January 1998. Government spokesman Igor Shabdurasulov commented that the wave of publications describing alleged complications related to the redenomination appear to have been "commissioned."

...BUT PRESIDENTIAL ADVISER DISAGREES

Meanwhile, Mikhail Krasnov, Yeltsin's legal adviser, told journalists on 16 September that the parliament will have to amend some laws to remove three zeroes from fixed ruble amounts, Russian news agencies reported. However, Krasnov denied that the presidential administration or its Main State Legal Department is opposed to the currency reform or has suggested rescinding the August presidential decree on redenomination. He predicted that the State Duma will approve all the necessary amendments. "Segodnya" argued on 15 September that the department has in effect "armed the opposition" by suggesting that opposition Duma deputies may not agree to lower minimum wages and pensions by 1,000 times in line with the currency reform.

SQUEAKY WHEELS GET GREASE IN DEFENSE INDUSTRY

Federation of Independent Trade Unions leader Mikhail Shmakov announced that within a week, 500 billion rubles ($85 million) will be allocated to pay back wages to workers in the defense industry, ITAR-TASS reported on 16 September. Shmakov said top officials from the Finance, Defense and Economics Ministries, along with the presidential administration, made the decision at a 16 September Kremlin meeting, which Shmakov attended. Since the funds will not cover all wage arrears owed to defense industry workers, he said, the money will be directed toward "hot spots," where workers have staged protests. The beneficiaries of the funds earmarked for wage arrears will include the submarine repair factory Zvezda in Primorskii Krai, the ship-building plant in Komsomolsk-na-Amure, Khabarovsk Krai, and a defense factory in Severodvinsk, Arkhangelsk Oblast.

LEFT OPPOSITION ALLIANCE TO CONTEST MOSCOW DUMA ELECTION

Communist Party leader Zyuganov on 16 September met with leaders of the opposition electoral bloc My Moscow, which will contest the December election to the Moscow City Duma, ITAR-TASS reported. The groups that form My Moscow are also members of the Popular-Patriotic Union of Russia (NPSR), created out of organizations that supported Zyuganov's 1996 presidential bid. However, My Moscow is not campaigning as a Communist opposition movement. Duma deputy Aleksei Podberezkin, the leader of My Moscow, told "Nezavisimaya gazeta" on 17 September that My Moscow has no "party ideology" and includes many organizations that have never been associated with "the Reds." Podberezkin added that My Moscow favors cooperation with the city's executive authorities and is "in solidarity with [Moscow Mayor Yurii] Luzhkov" over the need to adhere to "state-minded principles."

ZYUGANOV CRITICIZES YELTSIN'S MEETING WITH BANKERS...

Commenting on Yeltsin's meeting the previous day with six leading Russian bankers, Zyuganov told RFE/RL's Moscow bureau on 16 September that the state should regulate the economy through "normal laws and normal rules," not by having the president gather quarreling bankers together and play peacemaker. Yeltsin was compelled to meet with the bankers because "normal" laws do not exist in Russia and because the president apparently did not trust any cabinet minister to do the job, Zyuganov argued.

...AND RUSSIAN TV

In an interview published in "Sovetskaya Rossiya" on 16 September, Zyuganov said the recent creation of the television network Kultura arouses "suspicion." He noted that the network's top executive, former Deputy Culture Minister Mikhail Shvydkoi, had previously "tried to convince us to turn cultural valuables over to Germany." In addition, Zyuganov charged that "not a single [ethnic] Russian person" appears on the five leading Russian television networks. All nationalities in Russia have the right to be represented on television, he argued, including ethnic Russians, who form a majority of the population. Government spokesman Igor Shabdurasulov slammed Zyuganov's comments as "boorishness," ITAR-TASS reported on 16 September. Shabdurasulov also erroneously claimed that in the "Sovetskaya Rossiya" interview, Zyuganov advocated banning all non-ethnic Russians from appearing on television.

FIRST LADY TO CO-CHAIR NEW TV NETWORK'S BOARD OF TRUSTEES

Naina Yeltsin has agreed to co-chair the board of trustees of the nationwide television network Kultura, ITAR-TASS reported on 16 September, citing Kultura head Shvydkoi. Yeltsin issued a decree in August creating the new network, which is to be devoted primarily to educational and cultural topics (see "RFE/RL Newsline," 27 August 1997). Appearing at a Moscow press conference with the renowned cellist and conductor Mstislav Rostropovich, Shvydkoi asked Rostropovich to become an honorary co-chairman of the Kultura board of trustees as well, according to "Kommersant-Daily" on 17 September. Rostropovich neither accepted nor declined the invitation, suggesting instead that President Yeltsin be made chairman of the network's trustees.

YELTSIN DISMISSES TWO ADVISERS

Yeltsin on 16 September dismissed presidential advisers Georgii Satarov and Lev Sukhanov, according to ITAR-TASS . Satarov was reported to be transferring to an unspecified new job, and Sukhanov was said to be retiring. "Kommersant-Daily" commented on 17 September that the dismissals are surprising only in that they did not occur earlier. Satarov was considered one of the "Kremlin doves," along with former security adviser and Defense Council Secretary Yurii Baturin, legal adviser Mikhail Krasnov, and economic adviser Aleksandr Livshits. But Satarov had commented in recent months that he felt less at ease in the current administration. Sukhanov has long wielded virtually no influence in the Kremlin, the newspaper said. Former foreign policy adviser Dmitrii Ryurikov and former top aide Viktor Ilyushin, who, like Sukhanov, were considered part of the Kremlin "old guard," have long since been dismissed.

KALININGRAD GOVERNOR WANTS TO LEGALIZE PROSTITUTION

Leonid Gorbenko has advocated legalizing prostitution in Kaliningrad Oblast in order to combat the spread of AIDS in the region, "Izvestiya" reported on 17 September. Kaliningrad has recorded more AIDS cases than any other Russian region. Health officials have registered more than 1200 people who are infected with the HIV virus, and more than 100 Kaliningrad residents have been diagnosed with the disease. According to an official in the regional branch of the Interior Ministry, about 90 percent of those arrested for prostitution or drug-related crimes in Kaliningrad are infected with HIV. Gorbenko proposes legalizing a few brothels and providing close medical monitoring of the prostitutes who work in them. "Izvestiya" argued that even if approved by the regional legislature, such a decision probably requires changes in federal crime legislation and therefore cannot be made at the regional level.

TAJIK OPPOSITION RELEASES PRISONERS

Mirzo Zieyev, a field commander of the United Tajik Opposition, has released 25 government soldiers, RFE/RL correspondents reported on 17 September. Zieyev's unit captured the soldiers during fighting in the Tavil-Dara region of central Tajikistan. Originally, five ethnic Russian soldiers taken prisoner were to be handed over. But as a gesture of goodwill, the UTO released an additional 20. Helicopters from the CIS peacekeeping force air-lifted the released soldiers from Tavil-Dara.

ITALIAN PRIME MINISTER IN KAZAKHSTAN

Romano Prodi was in Almaty on 15-16 September to discuss trade with Kazakh leaders and businessmen, RFE/RL correspondents and Interfax reported. Prodi met with President Nursultan Nazarbayev and Prime Minister Akezhan Kazhegeldin on the second day of his visit. At a news conference following the meeting, it was announced that Italian firms will be granted the right to explore and develop two hydrocarbon fields in Kazakhstan's sector of the Caspian Sea. Nazarbayev praised the Italian company Agip for its work in the Karachangansk oil and gas field in western Kazakhstan. He also said that Almaty is interested in importing Italian equipment for producing machine-tools and processing farm products. The volume of trade between the two countries in the first half of this year totaled $187 million.

KYRGYZ HOMELESS THWARTED IN BID TO REGISTER

The Justice Ministry has rejected an application by the Yntymak movement to officially register, a ministry official told RFE/RL correspondents on 16 September. Yntymak was formed by homeless people who moved to Bishkek from the countryside in search of work. The group filed registration papers on 11 July but had received no reply by the time of the two-month deadline for a decision. Justice Ministry officials now say there were mistakes in the registration form. Yntymak members have demonstrated several times in front of the government building, asking for plots of land on which to build dwellings. They began constructing homes without permission, but the authorities demolished the home of the movement's chairman, Nurlan Alymkulov, on 10 September. Local authorities have filed charges against Alymkulov and other members of the movement.

JAPAN TO BUILD OIL REFINERIES IN KYRGYZSTAN, GEORGIA

Japan's Sumitomo Corporation has signed an agreement to build an oil refinery in Bishkek, RFE/RL's Bishkek bureau reported on 16 September. It has also promised long-term loans to the Kyrgyz government. President Askar Akaev met with a group of Sumitomo executives on 16 September. Five days earlier, the Itochu corporation signed a memorandum on building an oil refinery at the Georgian Black Sea port of Supsa, the Caucasian Institute for Peace, Democracy, and Development reported, citing the 12 September issue of "Kavkasioni." Members of the Turkish-Japanese Business Council visited Baku and Tbilisi in early September to discuss projects connected with the export of Azerbaijan's Caspian oil, according to "Nezavisimaya gazeta" on 4 September.

GEORGIAN POLICE, SVANS CLASH OVER DRUGS HARVEST

Georgian police engaged in destroying illegal poppy plantations in the remote Mestia Raion of northwestern Georgia were attacked by local Svan mountain dwellers on 15 September, Russian agencies reported. Four police and two Svans were killed and several more police officials wounded in the shoot-out that followed. The Svans are a Kartvelian ethnic group who speak a language related to Georgian.

GEORGIAN HOSTAGES RELEASED

Four ethnic Georgians abducted by Abkhaz police on 14 September were released two days later as a result of the Abkhaz and Georgian governments' coordinated efforts, RFE/RL's Tbilisi bureau reported. "Nezavisimaya gazeta" on 17 September suggested the motive for the abduction was not political. The newspaper noted that rival Abkhaz and Georgian gangs are engaged in the export of walnuts from Abkhazia's Gali Raion to Turkey. The Abkhaz police confiscated two trucks transporting walnuts when they took the Georgians hostage.

ABKHAZIA TO HOLD REFERENDUM ON POLITICAL STATUS

The Abkhaz authorities plan to hold a referendum to determine the region's future political status, the Caucasian Institute for Peace, Democracy, and Development reported, citing the 12-15 September issue of "Meridiani." Ethnic Georgian residents of Gali Raion will be allowed to participate in the vote. Participants will be asked to decide whether Abkhazia should be part of Georgia, part of Russia, or an independent state.

EU CRITICIZES BELARUS

EU Foreign Ministers on 15 September issued a strongly worded statement criticizing Belarus for "allowing recurrent violations of human rights" and for its "obstructive" attitude to relations with the EU, RFE/RL's Brussels correspondent reported. The statement announced several measures to restrict contacts with and aid programs for Belarus. Observers in Brussels told RFE/RL's correspondent that Russia, and possibly other countries, have exerted influence to try to suppress the EU's criticism of Belarus.

BELARUSIAN POLICE SEIZE PROPERTY OF SOROS OFFICE

Alyaksandr Antipenka, the executive director of the Soros Foundation in Minsk , told RFE/RL's Minsk correspondent on 16 September that police have confiscated property belonging to the foundation's office. Antipenka estimated the value of the seized goods at $3,000. The Soros Foundation was forced to close its premises at the beginning of September after the government claimed it owes $3 million in back taxes. The foundation says that it previously received assurances from the government of its tax exempt status. It accuses Belarusian President Alyaksandr Lukashenka of seeking to destroy civil society in the country.

BELARUS, ESTONIA INITIAL ECONOMIC ACCORD

Estonia and Belarus have initialed an economic and trade cooperation agreement, ETA reported. Government delegations from both countries met in Minsk on 16 September. According to the Estonian news agency, the key element of the accord is the establishment of most- favored-nation status between the two countries.. The accord also deals with the transit of Estonian goods via Belarus.

UKRAINIAN GOVERNMENT SUBMITS 1998 BUDGET TO PARLIAMENT

The government on 16 September submitted the 1998 draft budget to the parliament, Reuters reported. The document provides for a deficit of 5.2 percent of gross domestic product. Two days earlier, a spokesman for Prime Minister Valery Pustovoitenko said Pustovoitenko would not submit the draft to the parliament until deputies had made changes to various tax laws. The Finance Ministry said, however, that the draft budget is based on existing tax laws. Under the constitution, the final budget must be passed by 1 January. But the parliament did not approve the 1997 budget until June of this year.

ESTONIAN DEFENSE CHIEFS SUBMIT RESIGNATIONS

Defense Minister Andrus Oovel and Major-General Johannes Kert, commander of the defense forces, have handed in their resignations over the deaths of 14 soldiers during peacekeeping maneuvers off Estonia's northwestern coast, ETA reported. The two defense chiefs had come under considerable pressure from the media to step down. Both said they felt responsible for the tragedy. Toomas Kitsing, Oovel's deputy at the Defense Ministry, also tendered his resignation. President Lennart Meri called an emergency session of the State Defense Council on 17 September to discuss whether to accept the resignations. The soldiers died while attempting to wade across a shallow bay during a storm at sea. Authorities have blamed the unit's commander, Jaanus Karm, for ordering the crossing. Karm, however, has said the exercise was approved by his military superiors.

LATVIAN PREMIER SPEAKS OUT AGAINST BUTINGE TERMINAL

Guntars Krasts has voiced his support for those opposed to the construction of an oil terminal in Butinge (Lithuania), close to the border with Latvia, BNS reported on 16 September. Krasts said that Riga has "every reason" to demand that Vilnius respect environmental regulations because of the danger posed to a nearby Latvian beach. At the same time, he said, Latvia should remember that "global money is looking for ways to work in the oil business." Latvian environmentalists have protested the construction of the terminal. They also plan to stage protest actions abroad.

POLISH PRESIDENT ON POST-ELECTION SCHEDULE

Aleksander Kwasniewski told journalists on 16 September that he plans to call the first post-election session of the parliament on 20 October. This would allow the maximum possible time for a ruling coalition to be formed. Under Polish law, the president has to summon the newly elected parliament no later than 30 days after election day, which is 21 September. Kwasniewski will have 14 days after the first session to designate a prime minister, who, he said, need not come from the largest political group in the new parliament. Following his appointment, Kwasniewski's premier-designate will have 14 days to win a confidence vote for his proposed cabinet.

CZECH GOVERNMENT THWARTED IN PLANS FOR SPECIAL FLOOD TAX

Deputies from Prime Minister Vaclav Klaus's Civic Democratic Party and its junior coalition ally, the Civic Democratic Alliance, have said they will not support the government's proposal to introduce a 13 percent income tax next year aimed at balancing the budget in the wake of the catastrophic July floods, Czech TV reported on 16 September. Since the opposition has said it will not support an increase in income taxes, the government must now find other ways to balance the budget. Finance Minister Ivan Pilip said on 15 September that he may propose increasing taxes on consumer goods. Meanwhile, the Finance Ministry has announced that this year's budget deficit is likely to total 14 billion crowns ($450 million).

SLOVAK PARLIAMENT UNSURE HOW TO PROCEED IN GAULIEDER CASE

The parliamentary Constitutional and Legal Committee on 16 September failed to decide how to proceed if there continues to be no quorum at legislative sessions, Slovak Radio reported. The coalition parties have repeatedly boycotted the sessions called to discuss the case of deputy Frantisek Gaulieder, who was stripped of his parliamentary mandate in December 1996 after he left the ruling Movement for a Democratic Slovakia (HZDS). The Constitutional Court ruled in July that the parliament had breached Gaulieder's constitutional rights when it stripped him of his mandate on the basis of a "letter of resignation." Gaulieder denies having written such a letter. Since the Constitutional and Legal Committee was unable to reach a decision, parliamentary chairman Ivan Gasparovic of the HZDS will have to decide how to proceed.

HUNGARIAN PREMIER REASSURES ETHNIC SLOVAKS

At a meeting with representatives of the Slovak minority in Hungary, Gyula Horn said on 16 September that Slovak Prime Minister Meciar's proposal for a "minorities exchange" between the two countries is not on Hungary's agenda. Slovak minority leader Mihaly Mata told reporters that media reports about the proposal have aroused fears among Hungary's ethnic Slovaks. He said while Slovaks do not intend to leave Hungary, they consider Slovakia their second homeland, regardless of any developments in "high politics."

HUNGARY SEEKS JAPANESE INVESTMENTS

Hungarian Finance Minister Peter Medgyessy and National Bank President Gyorgy Suranyi met in Tokyo on 16 September with leading Japanese businessmen in a bid to attract more Japanese investment to Hungary. Japanese investment in Hungary to date totals some $500 million. Eximbank President Yashuda Hiroshi assured Medgyessy that Japanese development credits will continue to be available to Hungary. So far, Eximbank has extended credits worth $300 million to small and medium-size companies in Hungary.

U.S. DIPLOMAT NOT TO DISQUALIFY BOSNIAN SERB HARD-LINERS

Robert Frowick, the U.S. diplomat supervising the Bosnian local elections held on 13-14 September, refused in Sarajevo on 16 September to disqualify the Serbian Democratic Party (SDS), the main Serbian nationalist party, from the vote. Frowick said that to do so would jeopardize the peace process and the safety of foreign personnel on Bosnian Serb territory. A panel of foreign judges had earlier disqualified the SDS on the grounds that indicted war criminal Radovan Karadzic is still, in effect, head of the party. The Norwegian judge who heads the panel said he may resign to protest Frowick's decision. Some observers charged that Frowick and other foreigners monitoring the vote have already made too many concessions to the main Serbian, Croatian, and Muslim nationalist parties, the "Los Angeles Times" reported on 17 September.

MAJOR POWERS DEMAND RESPECT FOR BOSNIAN ELECTION RESULTS

Diplomats from the contact group countries (the U.S., the U.K, Russia, Germany, and France) said in London on 16 September that those who do not respect the outcome of the vote can expect stiff sanctions. The contact group also demanded that representatives of the Serbs, Croats, and Muslims quickly agree on long over-due measures, such as establishing a common citizenship and issuing joint passports. Meanwhile in Moscow, a Foreign Ministry spokesman said Russia expects the elections to lead to a stabilization of the overall situation in Bosnia. The spokesman added that close cooperation between Russia and its Western partners helped make the elections a success.

U.S. WANTS QUICK CONCLUSION OF CROAT-BOSNIAN TALKS

U.S. mediators said in Zagreb on 16 September that Washington hopes Croatian and Bosnian negotiators meeting in the Croatian capital will conclude an agreement on Bosnia's access to the Adriatic by the end of the month, an RFE/RL correspondent reported from Zagreb. The issue has bedeviled relations between Zagreb and Sarajevo for several years. Ploce, Bosnia's natural outlet to the sea, belongs to Croatia. Neum, a small fishing village belonging to Bosnia, cuts Croatia's Adriatic coast in two. Croatian authorities fear that Bosnia may seek to annex Ploce. The Bosnian authorities, for their part, will not cede transit rights in Neum to Croatia without concessions by Zagreb over Ploce.

HYPER-INFLATION TO RETURN TO SERBIA?

A panel of leading Serbian economists said in a statement on 15 September that the current election campaign could lead to a return to rampant inflation that plagued Yugoslavia for much of the 1980s and 1990s. The experts said that the government has printed money to pay wages and pensions in order to prevent possible social unrest in the runup to the 21 September presidential and parliamentary vote. The economists added that the only way to avoid the return of the rampant inflation is for the government to withdraw up to two billion dinars from circulation right after the elections. Observers noted that the return of hyper-inflation could prove politically and socially explosive, because much of the Serbian population already lives below the poverty level.

KOSOVO LIBERATION ARMY SAYS IT CARRIED OUT ATTACKS

The clandestine Kosovo Liberation Army (UCK) has said in a statement in Pristina that it is responsible for a recent series of armed attacks on police stations (see "RFE/RL Newsline," 16 September 1997). The statement claimed that some Serbian policemen were killed and wounded in the raids, but the official Serbian media have said there were no casualties. Meanwhile, Montenegrin presidential candidate Prime Minister Milo Djukanovic called for an improvement in relations between Yugoslavia and Albania, the Belgrade daily "Danas" reported on 16 September. Observers noted that economic links between Montenegro and Albania have been close since the collapse of communism. Albania was home to a major fuel smuggling operation into Montenegro during the war, when Yugoslavia was under an international embargo.

ALBANIAN PARLIAMENT APPROVES KEY TAX HIKE

The parliament on 16 September approved a new tax law that the Council of Ministers had submitted the previous day, "Dita Informacion" reported. The law raises value-added tax from 12.5 percent to 22 percent and includes hikes in taxes on tobacco, alcoholic beverages, imported nonalcoholic beverages, coffee, fuel, and gas. The IMF had demanded the hikes as a condition for implementing a cooperation agreement and for calling an international donors' conference later this year. Albania's budget deficit reached some 10 percent of GDP in 1996. Estimates suggest it could grow to 40 percent in 1997.

EUROPEAN POLICE MISSION TO STAY ON IN ALBANIA

The Western European Union defense organization voted in Brussels on 16 September to extend the mandate of its police training mission by six months, until March 1998. The WEU mission consists of 24 police officers from 15 countries, including Bulgaria, Estonia, and Romania as well as Western European states. Meanwhile in Tirana, a court sentenced Ilir Ceta to 13 years in prison for trying to assassinate President Sali Berisha near Durres in June (see "RFE/RL Newsline," 5 June 1997). Ceta said he wanted to kill Berisha because he considered him the "main enemy of the Albanian people."

ROMANIAN PARLIAMENT AMENDS LAND RESTITUTION LAW

The Senate on 16 September amended the 1991 law on land restitution, RFE/RL's Bucharest bureau reported. The amendment, however, does not specify how much land can be restituted to former owners. Under the 1991 law, a maximum of 10 hectares of farm land and 1 hectare of forest land could be restituted per family. The National Peasant Party Christian Democratic wants the amended law to allow up to 50 hectares of farm land and 30 hectares of forest to be returned to former owners, but the Democratic Party is opposed to those amounts. The limits on restituted land will be decided by the parliament by 31 March 1998, following a survey of the total land available for restitution. In the meantime, former owners will be able to reclaim properties exceeding the previous limit. The Chamber of Deputies has already approved the amended law. The opposition boycotted the vote in the Senate, saying the amended legislation would lead to the restoration of landed gentry.

ROMANIAN OPPOSITION PARTIES AGREE TO FORM ALLIANCE

Representatives of the Party of Social Democracy in Romania, the Greater Romania Party, and the extra-parliamentary Socialist Labor Party have agreed to set up an alliance, RFE/RL's Bucharest bureau reported on 16 September. They said their main aim is to bring about a change in the ruling coalition. Also on 16 September, the leadership of the Party of Romanian National Unity (PUNR) criticized former chairman Gheorghe Funar, who recently announced that his party will join an opposition grouping called the Alliance for Romania's Revival. The PUNR said Funar "had no mandate" from the party to make such an announcement. Meanwhile, Funar, who is also mayor of Cluj, has ordered the town's park benches to be painted in Romania's national colors "to show that Cluj is a Romanian town."

RUSSIA DISTANCES ITSELF FROM DEPUTIES' SUPPORT FOR TRANSDNIESTER

The Russian Foreign Ministry on 17 September issued a statement saying the State Duma deputies who participated in the seventh anniversary celebrations of the Transdniester breakaway region's independence "did not represent the official position of Russia" (see "RFE/RL Newsline," 4 September 1997), BASA-press reported on 16 September. The statement noted that the resolution of the Transdniester conflict rests in adopting a special status for the region that would reflect Moldova's territorial integrity. It added that any "unilateral interpretation" of the memorandum signed in Moscow in May is "counterproductive."

GAGAUZ-YERI OPPOSITION DENOUNCES LOCAL GOVERNOR

At a press conference in Chisinau on 16 September, opposition representatives from the Gagauz-Yeri autonomous region of Moldova accused Governor Georgi Tabunshchik of breaking the region's electoral law, an RFE/RL correspondent reported. They said the press conference was held in Chisinau, rather than in the region's capital, Comrat, because there is "heavy censorship" and "pluralism of opinion is not accepted" in Comrat. Deputy Constantin Tusanji said that on Tabunshcik's orders, the local electoral commission had falsified the results of the 31 August elections for Comrat mayor. Tusanji ran for the mayoralty and claims to have received 53 percent of the vote. The organizers of the press conference claimed that foreign countries--particularly the U.S.--are backing Tabunschik's "unpopular regime," Infotag reported.

BULGARIA TO CLEAR MINES FROM TURKISH BORDER

General Lyutskan Lyutskanov, secretary of the Ministry of Internal Affairs, says Bulgaria will remove mines at its southern border with Turkey by the end of 1998, the daily "Standart" reported on 16 September. Lyutskanov said there are some technical problems involving the removal of the mines, noting that the fields where they were planted are much overgrown and that access is difficult. Also on 16 September, the Interior Ministry announced that police in northern Bulgaria arrested a man who tried to smuggle 30,000 pirate compact discs to neighboring Serbia. The value of the discs is estimated at some $150,000.

Just as the Romanian are divided by various cleavage lines, so the Hungarians have different attitudes and are sociologically heterogeneous. Broadly, they fall into three categories: those in the overwhelmingly Hungarian areas of the Szekler lands (some 700,000 people); those in the mixed areas of central Transylvania (around 500,000), for whom interaction with Romanians is a daily experience; and those from the area closest to Hungary itself (also around 500,000). The last category is closer also in culture and values to the ones dominant in Hungary. These sociological cleavages are not translated into politics: Hungarians vote largely for the Hungarian political party, the Hungarian Democratic Federation of Romania (UDMR).

The Hungarians of Romania are not necessarily well disposed toward Hungary. They have been known to refer to Hungary as "the country where the cheese is artificially enriched with vitamin C," thereby implying their Hungarian identity is far more authentic than the Hungarians of Hungary itself. The political fall-out of this attitude means there is virtually no support for reunification with Hungary. When the Transylvanians go to Hungary, they are foreigners there.

In essence, their coexistence with the Romanians and their interaction with the Romanian state--even when that interaction has been hostile--have reshaped their identity. The gap between them and Hungary is growing, while their integration in Romania is an accomplished fact.

The attitude of the Transylvanian Hungarians to the Romanians is very similar to how the Romanians see them: they accept the majority and have learned to live with them but do not warm to them particularly. In this context, the threefold internal cleavage in the minority has some political relevance in attitudes toward the Romanian majority and the Romanian state.

In the Szekler lands, the Hungarian elite has more or less reestablished the dominant position it had before the industrialization of the Ceausescu era dislodged them. The Romanian elite has largely gone, although the middle- and lower-level bureaucrats remain. The area is fully bilingual; only the institutions of the Romanian state (police, military, railroads) are monolingual. In the Szekler lands, low levels of competence in Romanian are widespread, while at the bottom end of the social scale, knowledge of Romanian is barely necessary. As a result, the Romanians are the minority in this region.

In central and western Transylvania, the situation is quite different. The population is mixed, and there is competition between the two groups for resources. Transylvania is changing rapidly. It is no exaggeration to say that it is undergoing a second modernization, after the failed communist modernization. This process is uneven and uncontrolled. The impact of the Romanian state is comparatively weak, because its leverage (both financial and administrative) is limited.

There is also the economic pull of Hungary, not to mention its cultural prestige. Despite the differentiation noted above, Budapest is the pole of attraction. Even more significant is the Transylvanian Hungarians' own aspirations, skills, and determination to survive as a cultural community, separate from both Hungary and the Romanians.

One of the paradoxes of the present situation is that the UDMR is a member of the government. In effect, this is the first time that the Hungarians are participating in a democratically elected Romanian government. Having acquired an attitude that regards the Romanian state and government as anti-Hungarian (the legacy of the Ceausescu and Iliescu periods), the shift is not an easy one for many Hungarians to accept.

They see their party as their protector, and it is hard for them to identify the Romanian state as being actively theirs. The legacy of suspicion is deeply engrained. At the same time, their expectations of creating a fully-fledged Hungarian existence through participation in the government are unrealistic. In the Szekler lands, such expectations do not constitute an acute problem. But elsewhere they do and could give rise to friction if they are not met.

Given their vagueness, it is unlikely that those expectations can be realized. But their central significance is that the Hungarian minority in Romania fully accepts the Romanian state. Moreover, it constructs its political life around loyalty to that state and not to Hungary.

The author lectures at the London School of Economics. Part I of this article appeared in yesterday's "RFE/RL Newsline."